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Meetings, events drive Austria's hotel growth

Marriott International has opened its first hotel in Austria under its Moxy Hotels brand—one of several such projects across the country, and a sign of the growing appeal of both Austria as a whole and Vienna in particular for hotel investment.

Austria's appeal could be credited to its geo-political stability and position in the center of Europe, where it shares borders with seven other countries. Vienna can be reached by direct flights from almost 200 destinations worldwide and, according to STR Global, has around 363 hotels and 32,370 rooms.

MICE Support

The city’s strong meetings and events sector is helping to drive hotel development. The local tourist board reported a 7-percent increase in delegate numbers last year to 567,000 attendees. The resulting number of bed nights increased by 2 percent to around 1,718,000. The nationwide value-added of the Vienna conference industry contributed a total of €1.01 billion—up 3 percent on the year—to Austria’s GDP.

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“Vienna scores as an easily accessible central European hub, a multifaceted hotel sector, and top meeting location,” Norbert Kettner, the Vienna Tourist board's director, said. “Meetings are optimally supported by both urban and scientific establishments, and, with 36 licensed certification agencies for green meetings, Vienna has already demonstrated far-sightedness with respect to environmental compatibility and sustainability.”

Who's Building

This year has seen a number of developers and investors turn to Vienna. Beyond the Moxy opening, 18 months after entering the European market, Plateno announced its second 7 Days Premium Hotel in Vienna—the company's fourth in Austria.

“With growths over 6 percent in the number of arrivals and nights spent, Vienna was a natural choice for our new project in Europe,” Roland Paar, president, Plateno Europe, CIS & Middle East, said. “According to the experts, Chinese travellers start to gain importance in the city, and we couldn't miss the opportunity to be a part of this development.”

What's Next

The municipal government has been investing in cultural and tourist supply as well as security and infrastructure in order to meet its Vienna Tourism Strategy 2020 goals. The plan calls for turnover of €1 billion from the hospitality sector, plus some 18 million bednights by the 2020. The former has been met and the latter is looming.

PwC has predicted RevPAR growth of 1.3 percent for this year in Vienna, rising to an increase of 2.4 percent next year, “driven mainly from ADR as occupancy rates are near capacity.” Opportunity knocks for those who can meet the growing demand.

The forecast is all the more impressive coming on the heels of a disappointing 2016 for Vienna. Rising labor and overhead costs contributed to a 7.6-percent decline in profit per room at hotels in Vienna last year.

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.